Toronto-area millennials want their own backyards, report says

Thestar.com
May 22, 2018
Tamar Harris

Millennials may be delaying marriage and taking longer to move out of their parents’ homes, but when they do, their entry in the housing market is expected to drive up home prices and increase congestion in the suburbs, according to a new report from Ryerson University.

There are one million millennials still living with their parents in the Greater Toronto and Hamilton Area, and over the next decade, 700,000 of them will be looking to move into their own houses, according to a report released Tuesday.

But while millennials -- those aged 15 to 34 -- are perceived as the generation stuck in apartments, the “bulk are expected to want home ownership and ground-related ... housing with a backyard” when it comes time to buy, the report says.

There are, however, many obstacles. A millennial’s ability to move through the housing cycle “is being stifled by high housing costs and precarious employment,” said Diana Petramala, a senior researcher at Ryerson University’s Centre for Urban Research and Land Development.

“Affordability is out of reach for many millennials,” Petramala said. “The average income needed to buy a house in the GTHA requires six times more than what millennials make.”

The report suggests there could be more than 50,000 new millennial households created per year, as they begin leaving their parents’ homes.

That means demand for an already limited supply of homes in the GTHA will increase, “putting continued upward pressure on prices over the long term” and forcing millennials to take on high debt loads to become homeowners. Millennials will probably have to flee the urban core to find housing they can afford, which will in turn lead to longer commutes and more traffic congestion.

“Millennials don’t seem that different from the generations before them,” Petramala said. “They have similar spending patterns; they do want equal access to amenities.”

One way to find spaces for both affordable housing and amenities to cater to this generation is to create more mixed-use communities, Petramala added. That way, the province can also retain members of this growing generation here, as opposed to losing them to cities that can meet their housing demands.

But before millennials purchase, they need to leave the nest.

“The large share of millennials living with a parent also reflects the fact that leaving the family home is getting hard,” the report says. Millennials between the ages of 25 and 29 are increasingly living at home: 41 per cent in 2016, compared to 36 per cent in 2006.

And while millennials are delaying life events, such as getting married and having children, they’re not forgoing them altogether. “Millennials in their early 30s ... seem to be catching up on family-life goals,” the report says.

“It seems like they are living in apartments as they get older,” Petramala said, “but that’s part of the housing cycle they’re in.”

Some studies suggest that baby boomers are planning to help nudge their children toward home ownership. According to a recent Sotheby’s report on generational trends in the housing market cited in the Ryerson University report, 35 per cent of baby boomer households in the GTHA plan to give, or have already given, their children about $50,000 toward a down payment.

It’s “the price they are willing to pay to get their children out of their homes,” the report says.